Nonprofits come in all sorts of shapes and sizes, but people tend to scoff at the very idea of a nonprofit hospital. And for good reason--it is difficult to image an institution that collects so much money from individuals as anything resembling our traditional idea of a nonprofit organization, which brings to mind images of service and even scarcity. In the United States, there are 5,200 non-federal hospitals, and 3,000 of these are nonprofits.
There are a lot of ways to define and measure success in all things, especially nonprofits. For some, working in an industry that is largely service-based makes it difficult to measure success, but this is just a mental hurdle. Sure, you’ve got to think about it a little differently, but success can be measured in the absence of money quite easily. One way to do this is to set measurable goals and routinely evaluate your progress on them.
It’s still early in the new year, which means that there is still time to solidify your accounting practices for a super successful 2020. If you’re a new nonprofit, making the switch into the nonprofit world, or just hoping to get your finances in order, read on! We’ve got some best practices that will start your year off right. Diversify Every week, there are countless stories about nonprofit accountants gone bad--good people who find themselves in a difficult situation and end up taking advantage of nonprofits who are trying to operate on smaller budgets.
Planning a charity auction requires a ton of careful planning and decision-making. How you’ll handle item procurement, which type of auction you’ll host, who you’ll invite, whether you’ll work with a bookkeeper or accountant to balance the books after the fact— there are a lot of decisions to make. What comes first? Creating your budget, of course! Creating a budget early in the auction process, and then using it to guide all other decision making, is essential to keep your event on track.
For nonprofits without specialized accounting personnel, the budget discussion often ends with the annual budget. Numbers are carefully monitored and dollars accounted for, but in a fairly vague way. But what if something positively disrupts this balance--say, a large donation from a generous donor’s estate? So exciting is this idea that many nonprofit leaders haven’t even given it much thought, and speculate that the easy answer is putting the money into a reserve to allow funds for a rainy day or other “to be determined” emergency.